Navi
Mumbai continues to have the most affordable average rent among all
micro-markets of Mumbai. The well-planned city also has a growing footprint of
grade-A, and superior grade-A, offices. In addition, it is interestingly
emerging as a hub for captive services too. Captive service represents a
segment of Business Process Outsourcing (BPO) in which companies utilize
wholly-owned subsidiaries in place of 3rd part vendors.

The
benefit of doing such an arrangement would be to leverage the cost savings of using
offshore resources, while maintaining complete control over process and delivery.Thanks to
the availability of land parcels, good connectivity by road and rail to all
areas within the Mumbai metropolitan region and access to a human capital of
8-9 million in its proximity, it will emerge as one of India’s most prominent
captive hubs for the BFSI sector.

Over
the last 12-15 months, banks have either set up offices in this region or
expanded their existing captive footprint. Whether it is Axis Bank, IDFC or a
multinational bank like UBS (the first multinational bank to have set up a
captive office here), increasingly prefer to base their back-end operations in
such captive facilities here. Banks and other occupiers are happy after moving
their offices to Navi Mumbai from Mumbai and most have either firmed up their
expansion plans in this region while some others are in the process of doing
so.

While
Axis and IDFC have expanded considerably in this satellite city, SBI – that has
its global delivery centre in CBD Belapur – is also likely to follow.
Over the last seven years, prominent occupiers such as Accenture, L&T
Infotech, Capgemini (iGate), Cognizant and Syntel have made Navi
Mumbai an established back office hub. Many more businesses are expected to set
up their back-end operations in captive spaces here. The preference is
especially for the Airoli-CBD Belapur belt, which enjoys better
rail and road connectivity.

ADD

RESS

PRECINCT

QUA

RTER

YEAR

AREA LEASED (sq ft)

LAND

LORD

TENANT

Mindspace

1 Building 7

Airoli

Navi

Mumbai

1Q

2010

3,00,000

K Raheja
Corp

Wipro

Mindspace 1 Building 2

Airoli

Navi

Mumbai

4Q

2010

3,50,000

K Raheja

Corp

Accenture

Mindspace 1 Building 2

Airoli

Navi

Mumbai

1Q

2012

1,60,000

K Raheja

Corp

Accenture

Mindspace 1 Building 1

Airoli

Navi

Mumbai

1Q

2013

3,50,000

K Raheja

Corp

L&T Infotech

Gigaplex Building 1

Airoli

Navi

Mumbai

2Q

2013

2,11,000

K Raheja

Corp

Axis Bank

Mindspace 1 Building 11

Airoli

Navi

Mumbai

3Q

2013

1,75,000

K Raheja

Corp

Accenture

Mindspace 1 Building 11

Airoli

Navi

Mumbai

3Q

2014

2,50,000

K Raheja

Corp

Eclerx

Gigaplex Building 5

Airoli

Navi

Mumbai

4Q

2014

2,80,000

K Raheja

Corp

iGate Patni

Gigaplex Building 6

Airoli

Navi

Mumbai

2Q

2015

4,00,000

K Raheja

Corp

Accenture

Gigaplex B2

Airoli

Navi

Mumbai

2Q

2016

2,40,000

K Raheja

Corp

MNC Bank

Loma IT Park, Phase 1

Mahape

Navi

Mumbai

2Q

2016

2,00,000

Aurum Space

Hexaware

Phase 1, MindspaceJuinagar

Juinagar

Navi

Mumbai

4Q

2016

2,00,000

K Raheja

Corp

Foxconn

Mindspace JuinagarPhase 2

Juinagar

Navi

Mumbai

1Q

2017

1,80,000

K Raheja

Corp

IDFC Bank

Source:
JLL REIS

Two
more foreign banks are expected to move their back offices here in the coming
quarters. Many other companies are also in different stages of the transaction
lifecycle for having their own captive space in this micro-market. Proposals
from varied occupiers, for considerably big spaces, are currently underway and
if they all go through, it would add another ~1.5 mn sft of captive
space take up in Navi Mumbai. This is a sizeable area under consideration,
given that only about 3.3 mn sft of captive space was transacted
between 1Q2010 and 1H2017 in this micro-market.

Market dynamics

Captive
facilities are either built-to-suit or bought from a developer, post the project’s
completion. As many more companies move from their earlier strategy of
third-party outsourcing to having in-house back-end processes, taking care of
these additional employees becomes hugely important. This, in turn, is driving
the spike in demand for captive offices and it is expected to see stronger
momentum in Navi Mumbai over the next five years.

Apart
from the cost arbitrage, the geographical advantage of being situated so close
to Mumbai and not far from Pune helps the businesses operating here immensely.
Navi Mumbai enjoys access to 8-9 million people from within the city as also
from Thane, Panvel, Mumbai’s eastern suburbs and Kalyan-Dombivli areas.
Occupiers here are able to offer the ‘walk-to-work’ advantage to many of their
employees.

Apart
from access to such large talent pools and residential catchments, good quality
housing with all modern amenities is also available in abundance here. The
rents for a 1-BHK apartment range from INR 5,000 to INR 8,000 per month. The
social infrastructure is well developed and most areas have access to good
schools, hospitals, malls and entertainment avenues.